US Economic Update – 11 May 2012

US GDP grew by 0.5% (or 2.2% annualized) in the March quarter, confirming that the US economy is growing at a modest-to-moderate pace.

We expect GDP in the current quarter to grow at a similar rate to the March quarter and then strengthen in the second half of the year. We have left our forecasts for US growth unchanged at 2.3% in 2012 and 3.1% in 2013.

The recent slowdown in employment growth has raised concerns that the marked slowing in the first half of last year (and recession fears) will be repeated.

However, we don’t expect history to repeat itself as last year’s triggers are largely absent.